Chevron cites oil glut
January 31,2019-
Oil giant Halliburton is laying off some 73 employees at its Bakersfield plant in California according to a state notice filed in the past few days. The company had a round of job cuts this year, as the U.S. oilfield services firm struggles with falling profits and a drop in oil and gas activity. They recently closed a plant in El Reno, Oklahoma laying off about 800 employees. Earlier in October, the company also cut 650 jobs across Colorado, Wyoming, New Mexico and North Dakota, according to Reuters.
Kern oil officials blame some of their woes on tighter regulations in California.The Bakersfield Californian reports that “Gov. Gavin Newsom’s regulatory crackdown on California oil production is beginning to take a toll on Kern County’s economy.”
Their news report continues “Bakersfield-based oil producer Aera Energy LLC said Friday it will remove one drilling rig from its earlier-planned lineup of six in 2020. That’s a 17 percent reduction the company said will take 90 direct jobs away from one of its local contractors, Golden State Drilling.
Aera attributed the reduction to two recent state regulatory changes: extra layers of permitting scrutiny for the well-stimulation technique known as fracking and a temporary ban on high-pressure steam injections. Both technologies are commonly used in western Kern.”
Heading in the other direction is Presidents Trump’s Bureau of Land Management (BLM) that wants to open more Valley lands to drilling including in Tulare County. But Newsom says the state is “at odds” with BLM.
“The president’s new oil drilling plan is completely at odds with our state’s priority to ensure the protection of our natural resources and the health and safety of our residents,” Newsom said. “California will continue to fight the Trump administration’s attacks on California’s environment, and this new assault on our natural resources is no exception.”
Clearly the oil and gas slump is not just affecting California but internationally with news that Royal Dutch Shell PLC joined other of big oil companies that have recently taken big financial hits because of a global glut of oil and gas.
The U.S. saw a sharp decline in support activities for mining in November, according to data released Friday from the U.S. Bureau of Labor Statistics (BLS).
The BLS, which categorizes oilfield services under “support activities for mining,” reported a loss of 5,700 jobs for the month.
The nation added 100 jobs in mining support activities in October, but has experienced declines every other month this year.
Additionally, jobs in oil and gas extraction declined by 800 in November after adding 300 in October.
Citing a challenging market environment, several upstream companies have continued to reduce their staff, including natural gas producer Range Resources, shale and gas producer Gulfport Energy and frac sand supplier U.S. Silica.
The bottom line is there is too much oil chasing a decline in demand.The IEA still sees non-OPEC supply rising by 2.1 million barrels a day in 2020 — far outpacing projected global demand growth of 1.2 million barrels a day says a Forbes report.
The Wall St Journal reported this month that California biggest oil company Chevron- “Facing Fossil Fuels Glut, Takes $10 Billion Charge”.They reported that “ Oil giant cuts the value of its holdings, including shale, citing low prices caused by oversupply.
On analysis says the natural “gas glut is particularly pronounced in North America where shale production is flooding local markets.”
How all this affects Kern County including state regulation may become clearer with plans by the Newsom administration to visit the Kern Board of Supervisors in January to discuss this. Kern County supplies three-quarters of in-state oil production.